Trade

EU – Hong Kong Trade Relations

1. Bilateral Trade Relations

The EU is Hong Kong’s second largest trading partner after China. Bilateral trade in goods between the EU and Hong Kong resumed steady growth in 2012. Moreover, Hong Kong is a key conduit for trade between the EU and China, the world's largest exporter. For trade in services, Hong Kong is among the top ten trading partners in commercial services with the EU.

Trade in goods

EU goods exports to Hong Kong 2012: €33.6 billion

EU goods imports from Hong Kong 2012: €10.5 billion

Total trade in goods between Hong Kong and the EU 2012: €44.1 billion

Trade in commercial services

EU services exports to Hong Kong 2011: €9.8 billion

EU services imports from Hong Kong 2011: €8.2 billion

Total trade in commercial services between Hong Kong and the EU 2011: €18 billion

About 37% of EU exports of commercial services to Hong Kong were related to transportation, followed by other business services and financial services. On the other hand, EU imports of commercial services from Hong Kong continued to track the same pattern closely.

Foreign Direct Investment

The EU is Hong Kong's third largest source of foreign direct investment after China and the British Virgin Islands, and the largest source of foreign companies with 453 regional headquarters, 740 regional offices and 697 local offices (as of June 2012), outnumbering those of the US and Japan. At the same time, Hong Kong investment into Europe grew rapidly in recent years and became the eighth largest foreign investor of the EU in 2011 in terms of direct investment stock.

2. Hong Kong as a key conduit for EU-China trade

Hong Kong is an important entrepot for trade between the EU and China. According to the Hong Kong Trade and Industry Department, re-exports of EU origin goods through Hong Kong to China has grown by an annual average rate of more than 30% since China adopted its open door policy in 1978. In 2011, €9 billion of China's import of goods from the EU was routed through Hong Kong. On the other hand, re-exports of Chinese origin goods to the EU through Hong Kong during the same period soared by an annual average rate of around 24% and reached nearly €29 billion in 2011.

CEPA (Closer Economic Partnership Arrangement)

EU (as well as other foreign) companies established in Hong Kong which meet the criteria set out in the CEPA between the People's Republic of China and Hong Kong may enjoy additional advantages in terms of trade with China and access to its markets. Under CEPA, certain Hong Kong goods and services enjoy preferential access over and above China's WTO accession commitments.